Wednesday, July 22, 2009

Details Emerge of Atrocious California Budget Deal

This is disappointing. The politicians have not honored the people’s wishes in the budget they have created. Americans want some government services and are willing to pay for them. The Republican/Libertarian position that “all government is bad” seems to me like (mostly) more of the same “keep taxes low on rich people who don’t need government services.” The does not bode well for the the breakdown of American society that Ron Paul predicts in the previous post that is consistent with our overarching thesis from Strauss and Howe of a total breakdown of the American social contract in the next decade or so (see this for background).

Via the excellent crew at Calitics, a deal has been reached on the CA budget. Diarist Richard Lyonposted about this earlier this evening, but his link to the Sacramento Bee's inadequate article was short on details.

The L.A. TimesMercury News has more details on this atrocious, all-cuts budget. If a budget is indeed a moral document, it would seem from this budget that the state of California has the heart of a sociopath and an idiot. It is all the more infuriating to know that such a document was crafted despite overwhelming Democratic majorities in the state legislature, and near universal ownership of statewide positions (with the exception of Governor and Insurance Commissioner).

Included in the budget, courtesy of our own tireless dday:

$15 billion in cuts, no new taxes, $11 billion in gimmicks and borrowing $4-5 billion in local government raids only an $800 million reserve (initially the talks were for a $4 billion one) $6 billion in reductions to public schools, but an $11 billion dollar payment somewhere down the road though not in writing yes, there's new offshore drilling in this deal, going around the Lands Commission, and without an oil severance tax for the producers $1 billion assumed for the sale of the State Compensation Insurance Fund, which is not only unlikely but would really crush small businesses if sold no suspension of Prop. 98 basically a reinvention of state government, more austere, and precisely when folks need the opposite. ...three furlough days a month for some state employees still in place for the rest of the year $500 million in cuts to Cal Works smiles all around from Dem leg. leaders as they cheer that "we did not eliminate the safety net for California." Poking a big hole in it, apparently, qualifies as A-OK. ...we're also cutting $1.2 billion to corrections without releasing any prisoners, as per the actual politics as usual. The only way you can do that is by cutting every treatment or rehabilitation program in the prisons, or eliminating overtime for corrections officers. In other words, we're turning prisons into Public Storage units.

I've given a few brief primers on the California budget situation before. The key here is that majority Democrats in the legislature have no power to pass a budget, as Republicans have the power to block all budgets using the 2/3 rule, and to drive the state off a cliff.

Watching the state essentially go bankrupt is no problem for Republicans, who would see in it an opportunity to blame majority Democrats, as well as to break the backs of the public employee unions. So it is left to Democrats to cave on everything the GOP wants, lest the GOP shoot the hostage.

There is still the possibility that progressive Democrats may balk at the budget deal, but this is unlikely: the deal isn't going to get better if the current one isn't passed. Republicans in this state really are that extremist, and Arnold Scharwenegger has nothing to lose.

This is not an individual failing on the part of CA Democrats, except insofar as they have utterly failed to provide a consistent messaging structure to do away with GOP talking points, and inform the voters of the degree to which Republicans are destroying the state.

There is no compromise with these people, and this is not the sort of result the people of this progressive state want to see. But it is what we're getting. It is important to bear in mind what voters actually want to see in the state budget:

The vast majority of voters surveyed said the state should balance both spending cuts and tax increases to address the state budget shortfall. Revenue options supported by a strong majority of voters include:

Increasing taxes on alcoholic beverages (75% support)

Increasing taxes on tobacco (74% support)

Imposing an oil extraction tax on oil companies just like every other oil producing state (73% support)

Closing the loophole that allows corporations to avoid reassessment of the value of new property they purchase (63% support)

Increasing the top bracket of the state income tax from nine point three percent to 10 percent for families with taxable income over $272,000 a year and to eleven percent for families with taxable incomes over $544,000 a year (63% support)

Prohibiting corporations from using tax credits to offset more than fifty percent of the taxes they owe (59% support)

While voters strongly support these options to help California increase its revenue, voters are strongly against specific spending cuts proposed by Governor Schwarzenegger:

76% oppose cutting public school spending by $5.3 billion

73% oppose cutting funding for state colleges and universities by $1.2 billion

62% oppose cutting the state’s funding for homecare services by $494 million

Instead we get billions in corporate tax breaks, new oil drilling off the California Coast, and we remain the only state not to levy an oil extraction tax.

There are only two things that matter in California at this point: repeal of the 2/3 rule on budgets and revenue enhancements at the ballot box in 2010, and efforts toward a new Constitutional Convention. This year's budget process has proven that politics as usual is no longer remotely acceptable in our once great State.

UPDATE: Just to be clear, the vote on the package will be on Thursday--but not much is likely to change about it in the intervening time.